Has 2017 been the Year of the Mobile Wallet?

Earlier this year, we celebrated the first decade of the iPhone. Its arrival in 2007 ushered in the smart phone era and with it, a remarkable avalanche of personalized technology innovations.

Today, smart phones are ubiquitous. We relish bringing everything to the small(ish) screen in the palm of our hands: Twitter, Instagram, News, Business Email – at least until Slack takes over the world, our favorite travel apps, and of course, payments.

While banks are not going away (Wirecard has indeed a bank license in Europe), the user experience, channel ubiquity and generally utility that many startups have brought to finance and payments must be noted.

#MobileWallet: By 2020, 56% of U.S. consumers will transact $503 billion in mobile payments

Access and convenience are the premises, and promise, of mobile wallets

According to Business Insider Intelligence, customer adoption will grow constantly: it is expected that by 2020, 56% of U.S. consumers will transact $503 billion in mobile payments.

However, for the time being, U.S. mobile wallet adoption lags that of other like offerings in Asia. Alipay in China is expected to grow 92% year-over-year given the mass consumer adoption, along with the infrastructure that enables payment acceptance, both off and online. WeChat pay is another great example of a Chinese based service that has scaled phenomenally.

While we at Wirecard are proud to count both Alipay and WeChat as clients, a fundamental question that we have continued to look to answer through innovation is – how can the success of mobile payments be further accelerated?

The two major (surmountable) challenges for mobile wallets

One challenge for an even greater mobile wallet usage is to increase acceptance – especially among smaller merchants, only about 20% accept mobile payments. In addition, change needs motivation – this is why clear benefits to pay with a mobile phone versus a credit card have to be made obvious.

While “simple, convenient, and secure” is the mantra of all things technology, it is especially applicable to mobile payments:

Simplicity is checked off by mobile wallets and familiarization comes by frequent use – hey, you don’t need to pull out your wallet and phone; in many cases, the payment is delivered by one thumbprint, doesn’t come much easier;

Convenience is also a core property of mobile payment, especially with mobile payment apps like boon which is available in Europe where users can track their balances in real-time;

Security is guaranteed trough tokenization processes, or the ability to mask card numbers – significantly more secure than accidently dropping a card on the store floor.

So how to pragmatically drive further adoption of mobile wallets?

Let’s look at Samsung. Samsung Pay is working to drive utility, scale and adoption of their flagship mobile wallet deployment. If we believe that in order to reach scale, some intrinsic value must be delivered to the end users, Samsung is making great strides. Samsung Rewards, powered by Wirecard.

Through this program, cardholders earn points every time they make purchases, so effectively the more often you use Samsung Pay, the more rewards you earn. While a simple concept, it’s clear that driving user value is core to equation. However, unlike traditional rewards programs, Samsung Pay makes rewards available instantly to consumers through the Samsung Pay digital wallet.

Consumers have responded well to this incentive: Within a month, Samsung Pay doubled its transactions and the number of people using the app on a daily basis increased by 25 percent. Well under way to change customer behavior, Samsung Pay’s next steps include an expanded integration of the redeeming process.

We all are living and working in an exciting time – as Marc Andreessen proclaimed some years back, software is indeed eating the world, and for many of us, we have the honor and privilege of bringing this massive shift to the world.

Back to our fundamental belief of driving digital payment and technology adoption, beyond key partnerships with marquee clients like Samsung, WeChat, Alipay and other, we are also taking smaller, more incremental steps to enable our North American customer base to experience mobile wallets for themselves.

Just this weekwe enabled our North American clients to allow their end customers the ability to enable all U.S. Wirecard card’s in the three major mobile wallets – Apple, Samsung and Android. So whether through a client enablement, a branded experience, or our own mobile payment / banking solutions, we at Wirecard are excited about the future of payments and are running hard at helping bring these transformational technologies to the masses.

Side note – this is the first of a number of my blog posts as I’ve settled into my role leading Product and Marketing for Wirecard in North America. I look forward to your thoughts around subjects you’re interested in hearing about!

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Kevin is Vice President of Marketing and Product at Wirecard North America. A thought leader in technology and financial markets, Kevin blogs about global trends in fintech product development and about building the commerce experience of the future.